As filed with the Securities and Exchange Commission on July 26, 1996
Registration No. 333-____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Exact name of registrant as specified in its charter)
MARYLAND 84-1259577
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1873 SOUTH BELLAIRE TERRY CONSIDINE
STREET, 17TH FLOOR CHAIRMAN OF THE BOARD OF
DENVER, COLORADO 80222 DIRECTORS
(303) 757-8101 1873 SOUTH BELLAIRE STREET,
(Address, including zip 17TH FLOOR
code, and telephone num- DENVER, COLORADO 80222
ber, including area (303) 757-8101
code, of registrant's (Name, address, including
principal executive zip code, and
offices) telephone number, including
area code, of
agent for service)
COPY TO:
ROD A. GUERRA, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
300 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071
(213) 687-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. ( )
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box.
(X)
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. ( )
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ( )
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. (X)
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Proposed Amount
Class of Securities Amount Maximum Maximum of
to be Registered to be Offering Aggregate Regis-
Regis- Price per Offering tra-
tered Unit (1) Price (1) tion
Fee
Class A Common Stock, par 372,688 $19 $7,081,072 $2,442
value $.01 per share
(1) Calculated pursuant to Rule 457(c) of the rules and regulations under
the Securities Act of 1933, based on the average of the high and low
prices on July 23, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCOR-
DANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
PROSPECTUS
372,688 Shares
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Class A Common Stock
This Prospectus relates to the offer and sale by cer-
tain selling stockholders (the "Selling Stockholders") of up
to 372,688 shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock" or the "Securi-
ties"), of Apartment Investment and Management Company, a
Maryland corporation ("AIMCO" or the "Company"), as de-
scribed herein under "Selling Stockholders."
The Class A Common Stock is listed and traded on the
New York Stock Exchange (the "NYSE") under the symbol "AIV".
On July 23, 1996, the last reported sale price of the
Class A Common Stock on the NYSE was $19.125 per share.
The Selling Stockholders will sell the Class A Common
Stock offered hereby from time to time on the NYSE or such
other national securities exchange or automated interdealer
quotation system on which shares of Class A Common Stock are
then listed, through negotiated transactions or otherwise at
market prices prevailing at the time of the sale or at
negotiated prices. See "Plan of Distribution."
_______
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN FACTORS
RELEVANT TO AN INVESTMENT IN THE CLASS A COMMON STOCK.
_______
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_______
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT
PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is July 26, 1996
AVAILABLE INFORMATION
The Company is subject to the informational require-
ments of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and, in accordance therewith, files
reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at
the public reference facilities maintained by the Commission
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549; 7 World Trade Center, 13th Floor, New York, New York
10048; and Citicorp Center, Room 3190, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can
be obtained at prescribed rates from the Public Reference
Room of the Commission at 450 Fifth Street, N.W., Washing-
ton, D.C. 20549. Such material can also be inspected at the
New York Stock Exchange, 20 Broad Street, New York, New York
10005. The Commission also maintains a site on the World
Wide Web at http://www.sec.gov that contains reports, proxy
and information statements and other information regarding
registrants that file electronically with the Commission.
The Company has filed with the Commission a registra-
tion statement on Form S-3 (herein, together with all amend-
ments and exhibits, referred to as the "Registration State-
ment") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered
hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the
information set forth in the Registration Statement and the
exhibits and schedules thereto. Such additional information
is available for inspection and copying at the offices of
the Commission. Statements contained in this Prospectus, in
any Prospectus Supplement or in any document incorporated by
reference herein or therein as to the contents of any con-
tract or other document referred to herein or therein are
not necessarily complete, and in each instance reference is
made to the copy of such contract or other document filed as
an exhibit to, or incorporated by reference in, the Regis-
tration Statement, each such statement being qualified in
all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Compa-
ny with the Commission pursuant to the Exchange Act (File
No. 1-13232), are incorporated herein by reference:
(i) Annual Report on Form 10-K for the year ended
December 31, 1995;
(ii) Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1996;
(iii) Current Reports on Form 8-K dated Decem-
ber 29, 1995 (and Amendment No. 1 thereto) and January 1,
1996; and
(iv) the description of the Class A Common Stock which
is contained in a Registration Statement on Form 8-A filed
July 19, 1994, including any amendment or reports filed for
the purpose of updating such description.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Prospectus and prior to the termination of
the offering of the Securities shall be deemed to be incor-
porated by reference into this Prospectus and to be a part
hereof from the date of filing such documents.
Any statement contained herein or in a document incor-
porated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained
herein (or in the applicable Prospectus Supplement) or in
any other subsequently filed document that is or is deemed
to be incorporated by reference herein modifies or super-
sedes such previous statement. Any statement so modified or
superseded shall not be deemed to constitute a part of this
Prospectus, except as so modified or superseded.
Copies of all documents which are incorporated herein
by reference (other than the exhibits to such documents,
unless such exhibits are specifically incorporated by refer-
ence herein), will be provided without charge to any person
to whom this Prospectus has been delivered, upon request.
Requests for such copies should be directed to Apartment
Investment and Management Company, 1873 South Bellaire
Street, 17th Floor, Denver, Colorado 80222, Attention:
Corporate Secretary, telephone number (303) 757-8101.
_______
No dealer, salesman or other person has been authorized
to give any information or to make any representation not
contained in this Prospectus or any Prospectus Supplement
and, if given or made, such information or representation
must not be relied upon as having been authorized by the
Company or any underwriter or agent. This Prospectus and any
Prospectus Supplement do not constitute an offer to sell or
a solicitation of an offer to buy any of the securities
offered hereby in any jurisdiction where, or to any person
to whom, it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus or any Prospectus
Supplement nor any sale made hereunder or thereunder shall,
under any circumstances, create any implication that the
information herein or therein is correct as of any time
subsequent to their respective dates.
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . 2
Table of Contents . . . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 13
Selling Stockholders . . . . . . . . . . . . . . . . . . 13
Plan of Distribution . . . . . . . . . . . . . . . . . . 16
Certain Federal Income Tax Considerations . . . . . . . . 16
Legal Matters . . . . . . . . . . . . . . . . . . . . . . 27
Experts . . . . . . . . . . . . . . . . . . . . . . . . . 27
THE COMPANY
Apartment Investment and Management Company, a Maryland
corporation ("AIMCO" or the "Company," which terms include
its subsidiaries and controlled entities, unless the context
indicates otherwise), is a self-administered and
self-managed real estate investment trust (a "REIT") that
owns and operates multifamily apartment properties (the
"Owned Properties") and manages other multifamily apartment
properties (the "Managed Properties"). As of June 30, 1996,
AIMCO owned and operated 60 Owned Properties containing
15,850 apartment units. In addition to its Owned Properties,
as of June 30, 1996, AIMCO operated 131 Managed Properties,
including 3,075 apartment units for affiliates and 15,627
apartment units for 78 third parties, bringing the total
managed portfolio to 191 multifamily apartment properties
containing 34,552 apartment units.
The Company was formed in January 1994 to continue and
expand the multifamily apartment property ownership, acqui-
sition, redevelopment and third-party property management
operations of Property Asset Management, L.L.C., Limited
Liability Company, a Colorado limited liability company, and
affiliated companies and PDI Realty Enterprises, Inc., a
Delaware corporation (collectively, the "AIMCO Predeces-
sors"). On July 29, 1994, the Company completed an initial
public offering (the "Initial Offering") and used the net
proceeds to acquire its initial partnership interests in
AIMCO Properties, L.P., a Delaware limited partnership (the
"Operating Partnership"), through which substantially all of
the Company's operations are conducted. The Company's inter-
est in the Operating Partnership was approximately 85.1% as
of March 31, 1996, and its wholly owned subsidiary is the
sole general partner of the Operating Partnership. The
Company's interests in the Owned Properties are held through
controlling ownership interests in the Operating Partnership
and other limited partnerships and limited liability compa-
nies (collectively, the "Property Partnerships"). The
Company's third-party property management and asset manage-
ment business is principally conducted by Property Asset
Management Services, L.P., a Delaware limited partnership
("PAMS LP"). The Operating Partnership owns a 1% interest
in, and is the general partner of, PAMS LP. The sole limit-
ed partner of PAMS LP is Property Asset Management Services,
Inc., a Delaware corporation ("PAMS Inc." and, together with
PAMS LP, the "Management Subsidiaries"), which owns a 99%
interest in PAMS LP.
The Company's headquarters are located at 1873 South
Bellaire Street, 17th Floor, Denver, Colorado 80222 and its
telephone number is (303) 757-8101.
RISK FACTORS
An investment in the Class A Common Stock involves
various risks. In addition to general investment risks and
those factors set forth elsewhere in this Prospectus, pro-
spective investors should consider, among other things, the
following factors.
FINANCING RISKS
Debt Financing and Existing Debt Maturities. The
Company is subject to the risks normally associated with
debt financing, including the risk that the Company's cash
flow from operations will be insufficient to make required
payments of principal and interest, the risk that existing
indebtedness, including secured indebtedness, will not be
able to be refinanced or that the terms of any refinancing
will not be as favorable as the terms of existing indebted-
ness. The Company has significant outstanding indebtedness,
substantially all of which is secured by Owned Properties,
including outstanding borrowings under the Company's revolv-
ing line of credit (the "Credit Facility"). If the Company
does not have sufficient funds to repay its indebtedness at
maturity, it may be necessary for the Company to refinance
such indebtedness through additional secured debt financing,
unsecured private or public debt offerings or additional
equity offerings. If, at the time of refinancing, prevailing
interest rates or other factors result in higher interest
rates on refinancings, increases in the Company's interest
expense could adversely affect the Company's cash flow. If
the Company is unable to refinance its indebtedness on
acceptable terms, the Company might be forced to dispose of
properties on disadvantageous terms, potentially resulting
in losses to the Company and adverse effects on the
Company's cash flow from operating activities. In addition,
if the Company is unable to make required payments of prin-
cipal and interest on indebtedness secured by Owned Proper-
ties, such properties could be foreclosed upon by the lender
with a consequent loss of income and asset value to the
Company.
Risk of Rising Interest Rates. The Company's
borrowings under its Credit Facility bear interest at a
variable rate. In addition, the Company has obligations
under tax-exempt housing agency bonds that bear interest at
a variable rate. If interest rates increase or if the
Company incurs variable rate indebtedness under its Credit
Facility or otherwise, increases in interest rates could
increase the Company's interest expense and adversely affect
the Company's cash flow.
POSSIBLE CONFLICT OF INTERESTS; TRANSACTIONS WITH AFFILIATES
Prior to February 1996, in order to accommodate the
qualification of the Company as a REIT, four of the
Company's executive officers, Terry Considine, Peter
Kompaniez, Steven Ira and Robert Lacy, collectively, held a
5% beneficial interest in each of four regional business
trusts (the "Service Trusts") that owned four corresponding
regional limited liability companies (the "Service LLCs")
through which the Company's third-party property and asset
management business was then principally conducted. In
February 1996, the Operating Partnership and
Messrs. Considine, Kompaniez, Ira and Lacy contributed their
respective interests in the Service Trusts to PAMS Inc. in
exchange for 950,000 shares of non-voting preferred stock of
PAMS Inc., in the case of the Operating Partnership, and
50,000 shares of common stock of PAMS Inc., in the case of
Messrs. Considine, Kompaniez, Ira and Lacy. In April 1996,
the Service Trusts were dissolved and their interests in the
Service LLCs were distributed to PAMS Inc. In May 1996, the
four Service LLCs were merged into PAMS LP, with PAMS LP as
the surviving entity. Consequently, the Company's property
management and asset management business is now conducted
principally through the Management Subsidiaries. The four
officers' aggregate share of income in the four Service
Trusts was a loss of less than $5,000 for the period from
the Initial Offering to December 31, 1994 and such income
did not exceed $2,000 for the 1995 fiscal year. However,
because Messrs. Considine and Kompaniez are officers and
directors of the Company, and because Messrs. Ira and Lacy
are officers of the Company, conflicts of interest may arise
for such persons in transactions involving the Management
Subsidiaries. For example, in connection with the Company's
September 1995 restructuring of ownership interests in
certain of its subsidiaries (including the Service Trusts
and the Service LLCs), Messrs. Considine, Kompaniez, Ira and
Lacy made additional contributions to the Service Trusts to
maintain their 5% aggregate interests in the Service Trusts.
Although the Company believes such additional contributions
were made on terms that were fair to the Company and the
Service Trusts, the Company did not obtain independent
valuations of the Service Trusts and there can be no assur-
ance that the contributions to the Service Trusts by
Messrs. Considine, Kompaniez, Ira and Lacy were made in
amounts which reflected the market value of their interests.
In addition, PAMS LP provides property management
services with respect to certain Managed Properties in which
Messrs. Considine and Ira and other officers of the Company
have separate ownership interests. The fees for these ser-
vices have been negotiated on an individual basis and typi-
cally range from 3% to 6% of gross receipts for the particu-
lar property. Although these arrangements were not negotiat-
ed on an arm's-length basis, the Company believes, based on
comparisons to the fees charged by other real estate compa-
nies and by PAMS LP with respect to unaffiliated Managed
Properties in comparable locations, that the terms of such
arrangements are fair to the Company.
REAL ESTATE RISKS
General. Real property investments are subject to
varying degrees of risk. The yields available from equity
investments in real estate depend on the amount of income
generated and expenses incurred. The Company's income from
its Owned Properties may be adversely affected by the gener-
al economic climate, local conditions such as oversupply of
apartments or a reduction in demand for apartments in the
area, the attractiveness of the properties to tenants,
competition from other available apartments, the ability of
the Company to provide adequate maintenance and insurance,
and increases in operating costs (including real estate
taxes). The Company's income from its Owned Properties would
also be adversely affected if a significant number of ten-
ants were unable to pay rent or apartments could not be
rented on favorable terms. Certain significant expenditures
associated with real property investments (such as mortgage
payments, real estate taxes and maintenance costs) generally
are not reduced when circumstances cause a reduction in
income from the investments. In addition, income from prop-
erties and real estate values are also affected by such
factors as applicable laws, including tax laws, interest
rate levels and the availability of financing. If the
Company's Owned Properties do not generate income sufficient
to meet operating expenses, including debt service and
capital expenditures, the Company's income and its ability
to make distributions to its stockholders will be adversely
affected. Many of the factors that could adversely affect
the Company's income from its Owned Properties could also
adversely affect the Company's income from its Managed
Properties by reducing gross receipts for such properties.
Illiquidity of Real Estate. Real estate investments
may be illiquid and, therefore, could tend to limit the
ability of the Company to vary its portfolio promptly in
response to changes in economic or other conditions. In
addition, the Internal Revenue Code of 1986, as amended (the
"Code"), limits the ability of the Company, as a REIT, to
sell properties held for fewer than four years.
Operating Risks. The Company's Owned Properties and
Managed Properties are subject to operating risks common to
multifamily apartment properties in general. These risks may
adversely affect the Company's cash flow from operations.
For example, increases in unemployment in the areas in which
Owned Properties or Managed Properties are located may
adversely affect multifamily apartment occupancy or rental
rates and it may not be possible to offset increases in
operating costs due to inflation and other factors by in-
creased rents. Local rental market characteristics may also
limit the extent to which rents may be increased without
decreasing occupancy rates.
Competition. There are numerous housing alternatives
that compete with the Company's Owned Properties and Managed
Properties in attracting residents. The Company's proper-
ties compete directly with other multifamily rental apart-
ments and single family homes that are available for rent in
the markets in which the Company's properties are located.
The Company's properties also compete for residents with new
and existing homes and condominiums. The number of competi-
tive properties in a particular area could have a material
effect on the Company's ability to lease apartment units at
its properties and on the rents charged. Numerous real
estate companies compete with the Company in acquiring,
developing and managing multifamily apartment properties and
seeking tenants to occupy their properties. In addition,
numerous property management companies compete with the
Company in the markets where the Managed Properties are
located.
Change in Laws. Changes in laws increasing the poten-
tial liability for environmental conditions existing on
properties or increasing the restrictions on discharges or
other conditions, as well as changes in laws affecting
development, construction and safety requirements, may
result in significant unanticipated expenditures, which
would adversely affect the Company's cash flow from operat-
ing activities. In addition, future enactment of rent con-
trol or rent stabilization laws or other laws regulating
multifamily housing may reduce rental revenue or increase
operating costs in particular markets.
Restrictions Imposed by Laws Benefiting Disabled Per-
sons. Under the Americans with Disabilities Act of 1990
(the "ADA"), all places of public accommodation are required
to meet certain Federal requirements related to access and
use by disabled persons. These requirements became effective
in 1992. A number of additional Federal, state and local
laws exist which also may require modifications to the Owned
Properties, or restrict certain further renovations thereof,
with respect to access thereto by disabled persons. For
example, the Fair Housing Amendments Act of 1988 (the
"FHAA") requires apartment properties first occupied after
March 13, 1990 to be accessible to the handicapped. Noncom-
pliance with the ADA or the FHAA could result in the imposi-
tion of fines or an award of damages to private litigants
and also could result in an order to correct any
non-complying feature, which could result in substantial
capital expenditures. Although management of the Company
believes that the Owned Properties are substantially in
compliance with present requirements, if the Owned Proper-
ties are not in compliance, the Company is likely to incur
additional costs to comply with the ADA and the FHAA.
ACQUISITION AND DEVELOPMENT RISKS
The Company intends to engage in selective acquisition,
development and expansion of multifamily apartment proper-
ties. In addition to general investment risks associated
with any new real estate investment, acquisitions entail
risks that such investments will fail to perform in accor-
dance with expectations and that the costs of improvements
for that property will exceed previous expectations. Risks
associated with redevelopment and expansion of properties
include the risks that development opportunities may be
abandoned; that construction costs of a property may exceed
original estimates, possibly making the property uneconomi-
cal; that occupancy rates and rents at a newly completed
property may not be sufficient to make the property profit-
able; that construction and permanent financing may not be
available on favorable terms; and that construction and
lease-up may not be completed on schedule, resulting in
increased debt service expense and construction costs.
Development activities are also subject to risks relating to
any inability to obtain, or delays in obtaining, necessary
zoning, land-use, building, occupancy, and other governmen-
tal permits and authorizations.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
Qualification as a REIT involves the application of
highly technical and complex provisions of the Code, for
which there are only limited judicial or administrative
interpretations, and the determination of various factual
matters and circumstances not entirely within the Company's
control. For example, in order to qualify as a REIT, at
least 95% of the Company's gross income in any year must be
derived from qualifying sources and the Company must make
distributions to stockholders aggregating annually at least
95% of its REIT taxable income (excluding net capital
gains). Although the Company believes that it has operated
since the Initial Offering in a manner so as to qualify as a
REIT, no assurance can be given that the Company is or will
remain so qualified. See "Certain Federal Income Tax Consid-
erations." Although the Company is not aware of any pending
tax legislation that would adversely affect the Company's
ability to operate as a REIT, no assurance can be given that
new legislation, regulations, administrative interpretations
or court decisions will not change the tax laws with respect
to qualification as a REIT or the Federal income tax conse-
quences of such qualification.
The Company has received an opinion of Skadden, Arps,
Slate, Meagher and Flom, tax counsel to the Company, con-
cerning the qualification of the Company as a REIT. In
rendering this opinion, Skadden, Arps, Slate, Meagher & Flom
is relying on certain assumptions and representations by the
Company (including the value of the Management Subsidiaries
and of the Operating Partnership's ownership interests
therein, and other items regarding the Company's ability to
meet the various requirements for qualification as a REIT)
and on opinions of local counsel with respect to matters of
local law. The opinion is expressed based upon facts, repre-
sentations and assumptions as of its date and Skadden, Arps,
Slate, Meagher & Flom has no obligation to advise holders of
Class A Common Stock of any subsequent change in the matters
stated, represented or assumed or any subsequent change in
applicable law. No assurance can be given that actual oper-
ating results will meet these requirements, and a legal
opinion is not binding on the Internal Revenue Service (the
"IRS").
If in any taxable year the Company fails to qualify as
a REIT, the Company would not be allowed a deduction for
dividends to stockholders in computing taxable income and
would be subject to Federal income tax on its taxable income
at corporate rates. As a result of the additional tax lia-
bility, the Company might need to borrow funds or liquidate
certain investments in order to pay the applicable tax and
the Company would not be compelled to make distributions
under the Code. Unless entitled to relief under certain
statutory provisions, the Company would also be disqualified
from treatment as a REIT for the four taxable years follow-
ing the year during which qualification is lost. Although
the Company currently intends to operate in a manner de-
signed to qualify as a REIT, it is possible that future
economic, market, legal, tax or other considerations may
cause the Company to fail to qualify as a REIT or may cause
the Board of Directors to revoke the REIT election. See
"Certain Federal Income Tax Considerations."
The Company has also received an opinion of Skadden,
Arps, Slate, Meagher & Flom stating that the limited part-
nerships and limited liability companies in which the Compa-
ny has ownership interests (collectively, the "Partner-
ships") are properly treated as partnerships for Federal
income tax purposes. The opinion is expressed based upon
facts, representations and assumptions as of its date and,
with respect to certain matters of local law, relies on
opinions of local counsel. Skadden, Arps, Slate, Meagher &
Flom is under no obligation to advise holders of Class A
Common Stock of any subsequent change in the matters stated,
represented or assumed or any subsequent change in applica-
ble law. If the IRS were to challenge successfully the tax
status of any of the Partnerships as partnerships for Feder-
al income tax purposes, such Partnerships would be treated
as associations taxable as corporations. As a consequence,
the character of the Company's assets and items of gross
income would change and thereby preclude the Company from
qualifying as a REIT. See "Certain Federal Income Tax Con-
siderations -- Taxation of the Company -- Requirements for
Qualification." In addition, the imposition of a corporate
tax on the Partnerships would reduce the amounts that the
Partnerships could distribute to the Operating Partnership
and the Company and that the Company could then distribute
to the holders of its Class A Common Stock. See "Certain
Federal Income Tax Considerations -- Tax Aspects of the
Company's Investments in Partnerships".
In addition, certain requirements for REIT qualifica-
tion may in the future limit the Company's ability to con-
duct or increase the property management and asset manage-
ment operations of the Management Subsidiaries without
jeopardizing the Company's qualification as a REIT. See
"Certain Federal Income Tax Considerations."
OWNERSHIP LIMIT
In order for the Company to maintain its qualification
as a REIT, not more than 50% of the value of its outstanding
stock may be owned, directly or constructively, by five or
fewer individuals or entities (as set forth in the Code).
The Company's Articles of Incorporation prohibit direct or
constructive ownership of more than 8.7% (or 15% in the case
of certain pension trusts, registered investment companies
and Mr. Considine) of the combined total of outstanding
shares of the Company's Class A Common Stock and Class B
Common Stock by any person (the "Ownership Limit"). The
constructive ownership rules are complex and may cause
shares of Class A Common Stock or Class B Common Stock owned
directly or constructively by a group of related individuals
or entities to be constructively owned by one individual or
entity. The Board of Directors may permit ownership of up to
9.8% of the combined total of outstanding shares of the
Company's Class A Common Stock and Class B Common Stock by a
particular stockholder if it is satisfied, based upon the
advice of tax counsel or other evidence or undertaking
acceptable to it, that ownership in excess of the limit will
not jeopardize the Company's status as a REIT. A transfer of
shares to a person who, as a result of the transfer, vio-
lates the Ownership Limit may be void under some circum-
stances or may be transferred to a trust, for the benefit of
one or more qualified charitable organizations designated by
the Company, with the intended transferee having only a
right to share (to the extent of the transferee's original
purchase price for such shares) in proceeds from the trust's
sale of such shares.
RISKS OF THIRD-PARTY MANAGEMENT BUSINESS AND OWNERSHIP
STRUCTURE
Risks associated with the management of properties
owned by third parties include risks that management con-
tracts (which are generally cancelable upon 30 days' notice
or upon certain events, including the sale of the property)
will be terminated by the property owner or will be lost in
connection with a sale of the property; that contracts may
not be renewed upon expiration or may not be renewed on
terms consistent with current terms; and that the rental
revenues upon which management fees are based will decline
as a result of general real estate market conditions or
other factors and result in decreases in Company management
fees. If significant numbers of contracts are terminated or
are not renewed, the Company's net income from fee manage-
ment operations could be adversely affected. The owner of
substantially all of the commercial properties that are
managed by the Company has indicated that it intends to
dispose of such properties over a period of time. Upon any
such disposition, it is not likely that the Company would
continue to manage these properties. The loss of management
fee revenues from such properties would adversely affect the
Company's income from its third-party property management
business.
PAMS Inc. and the Operating Partnership own 99% and 1%,
respectively, of PAMS LP, through which the Company's prop-
erty management business is primarily conducted. PAMS Inc.
also owns 100% of PAM Consolidated Assurance Company, Ltd.,
a Bermuda insurance company ("PCA"). The Operating Partner-
ship is the general partner of PAMS LP and is therefore
responsible for the management of PAMS LP. However, all of
the voting stock of PAMS Inc. is owned by Messrs. Considine,
Kompaniez, Ira and Lacy. Consequently, the Company does not
have the ability to elect any directors of PAMS Inc. (or the
board of directors or officers of PCA), or to influence the
day-to-day decisions and other actions of PAMS Inc. or PCA,
and Messrs. Considine, Kompaniez, Ira and Lacy could cause
PAMS Inc. or PCA to take actions that are adverse to the
Company's interests. See "Risk Factors -- Possible Conflicts
of Interests; Transactions with Affiliates" and "Certain
Federal Income Tax Considerations -- Taxation of the Compa-
ny -- Asset Tests."
DEPENDENCE ON CERTAIN EXECUTIVE OFFICERS
Although each of Messrs. Considine, Kompaniez, Ira and
Lacy have entered into employment agreements with the Compa-
ny expiring July 29, 1996 (subject to successive one-year
renewals, unless previously terminated), the loss of any of
their services could have an adverse effect on the opera-
tions of the Company. In addition, although
Messrs. Considine, Kompaniez, Ira and Lacy have had substan-
tial multifamily real estate experience over the past 20
years, during the real estate recession of the late 1980s
and early 1990s, a number of real estate investments in
which they were involved produced unfavorable results. From
1975 through July 1994, partnerships or other entities in
which Mr. Considine had controlling interests invested in
approximately 35 multifamily apartment properties and com-
mercial real estate properties and five of these real estate
assets (four of which were multifamily apartment properties
and one of which was an office property) did not generate
sufficient cash flow to service their related indebtedness
and were foreclosed upon by their lenders, causing pre-tax
losses of approximately $11.9 million to investors and
losses of approximately $2.4 million to Mr. Considine. In
addition, in the late 1980s and early 1990s, three multifam-
ily apartment properties located in Colorado that were owned
by partnerships in which Mr. Ira had a general partnership
interest could not meet their debt payments, and were fore-
closed upon by their respective lenders, causing a pre-tax
loss of approximately $3.2 million to investors. Mr. Ira was
not the managing general partner of two of these partner-
ships.
The downturn in the real estate markets in the late
1980s and early 1990s also adversely affected the United
States real estate operations of Heron International N.V.
and its subsidiaries and affiliates (the "Heron Group").
During this period from 1986 to 1993, Mr. Kompaniez served
as President and Chief Executive Officer of Heron Financial
Corporation ("HFC"), and as a director or officer of certain
other Heron Group entities. In 1993, HFC, its parent Heron
International and certain other members of the Heron Group
voluntarily entered into restructuring agreements with
separate groups of their United States and international
creditors. The restructuring agreement for the United States
members of the Heron Group generally provided for the joint
assumption of certain liabilities and the pledge of unencum-
bered assets in support of such liabilities for the benefit
of their United States creditors. As a result of the re-
structuring, the operations and assets of the United States
members of the Heron Group were generally separated from
those of Heron International and its non-United States
subsidiaries. At the conclusion of the restructuring,
Mr. Kompaniez commenced the operations of PDI Realty Enter-
prises, Inc., a Delaware corporation and an AIMCO Predeces-
sor ("PDI"), which was engaged to act as asset and corporate
manager of the continuing United States operations of HFC
and the other United States Heron Group members for the
benefit of the United States creditors. In connection with
certain transactions effected at the time of the Initial
Offering, Mr. Kompaniez was appointed Vice Chairman of the
Company and substantially all of the property management
assets of PDI were transferred or assigned to the Company.
POSSIBLE ENVIRONMENTAL LIABILITIES
Under Federal, state and local environmental laws and
regulations, a current or previous owner or operator of real
property may be required to investigate and clean up a
release of hazardous substances at such property, and may,
under such laws and common law, be held liable for property
damage and other costs incurred by third parties in connec-
tion with such releases. The liability under certain of
these laws has been interpreted to be joint and several
unless the harm is divisible or there is a reasonable basis
for allocation of responsibility. The failure to remediate
the property properly may also adversely affect the owner's
ability to sell or rent the property or to borrow using the
property as collateral. In connection with its ownership,
operation and management of the Owned Properties and other
real properties, including the Managed Properties, the
Company could be potentially liable for such costs.
Certain Federal, state and local laws and regulations
govern the removal, encapsulation or disturbance of
asbestos-containing materials ("ACMs") when those materials
are in poor condition or in the event of building remodel-
ing, renovation or demolition, impose certain worker protec-
tion and notification requirements and govern emissions of
and exposure to asbestos fibers in the air. These laws may
also impose liability for a release of ACMs and may enable
third parties to seek recovery from owners or operators of
real properties for personal injury associated with ACMs. In
connection with its ownership, operation and management of
properties, the Company could be potentially liable for
those costs. There are ACMs at certain of the Owned Proper-
ties and there may be ACMs at certain of the Managed Proper-
ties. The Company has developed and implemented operations
and maintenance programs that establish operating procedures
with respect to the ACMs at the Owned Properties.
Certain of the Owned Properties are, and some of the
Managed Properties may be, located on or near properties
that have contained underground storage tanks or on which
activities have occurred which could have released hazardous
substances into the soil or groundwater. There can be no
assurances that such hazardous substances have not been
released or have not migrated, or in the future will not be
released or will not migrate onto the Owned Properties and
Managed Properties. In addition, the Company's Montecito
property in Austin, Texas, is located adjacent to, and may
be partially on, land that was used as a landfill. Low
levels of methane and other landfill gas have been detected
at Montecito. The remediation of the landfill gas is now
substantially complete. The environmental authorities have
preliminarily approved the methane gas remediation efforts.
Final approval of the site and the remediation process is
contingent upon the results of continued methane gas moni-
tors to confirm the effectiveness of the remediation ef-
forts. Should further actionable levels of methane gas be
detected, a proposed contingent plan of passive methane gas
venting may be implemented. The Company believes the costs
of such further limited action, if any, will not be materi-
al. Testing has also been conducted on Montecito to deter-
mine whether, and to what extent, groundwater has been
impacted. Test reports have indicated that the groundwater
is not contaminated at actionable levels.
All of the Owned Properties were subject to Phase I or
similar environmental audits by independent environmental
consultants. The audits did not reveal, nor is the Company
aware of, any environmental liability relating to the Owned
Properties that the Company believes would have a material
adverse effect on the Company's business, assets or results
of operations. Nevertheless, it is possible that the
Company's audits did not reveal all environmental liabili-
ties or that there are material environmental liabilities of
which the Company is unaware. Although the Managed Proper-
ties may not have been subject to Phase I or similar envi-
ronmental audits by independent environmental consultants,
the Company is not aware of any environmental liability
relating to the Managed Properties that it believes would
have a material adverse effect on its business, assets or
results of operations.
USE OF PROCEEDS
The Selling Stockholders (as defined below) will re-
ceive all of the net proceeds from the sale of shares of
Class A Common Stock offered hereby. The Company will not
receive any proceeds from the sale of such shares.
SELLING STOCKHOLDERS
This Prospectus relates to periodic offers and sales of
up to 372,688 shares of Class A Common Stock by the selling
stockholders named below (collectively, the "Selling Stock-
holders"). The table below sets forth certain information
with respect to the Selling Stockholders and their benefi-
cial ownership of Class A Common Stock as of the date here-
of. None of the Selling Stockholders holds any position,
office or has any other material relationship with the
Company, or any of its predecessors or affiliates, during
the past three years. All of the shares owned by the
Selling Stockholders, as set forth below, may be offered
hereby.
SELLING STOCKHOLDER SHARES OWNED
PRIOR TO OFFERING
Fred A. Achecar 3350
Michael Alboucrek 3350
John L. Bailey 3350
James R. and Adrienne W. Bandy Jr. 1675
S. Richard & Judith L. Bauersfeld 3350
Joseph W. Beasley and Geremy G. Beasley 1675
Larry Michael and Mary Agnes Beasley 3350
Richard A. Beckwith 6700
Stanford W. and Marilyn R. Berman 1675
Elsa Black 1675
Nancy Boccadoro 1675
Jane Gay Bondurant 1675
Patricia E. Bonsib 3350
Carl L. Bradley 3350
The Sylvia G. Camp Trust 1675
Barbara A. Campbell Estate 3350
Barbara A. Carlton 3350
William E. Chatfield 2512.5
The William E. Chatfield IRA 3350
The Lillie Cohen Trust 3350
FBO Basil Cole IRA 3350
Barbara M. Cook 3350
Arthur W. Cox III 3350
Eloise S. Davis 3350
M. Edwin Davis 6700
Robert Alan Dickinson 3350
Philip A. DiNenno Jr. 1675
The Neil L. Druks DMD PC Trust 1675
The Oscar Druks 1992 Trust 1675
The John B. Edgerton Jr. Trust 6700
The Mary S. Edwards Trust 3350
The Esther Eisman Trust 3350
The England Constr. Co. Trust 1675
William H. and Eunice A. Feldmiller 3350
The Kenneth Fortgang Trust 1675
David A. Freyman 6700
The Eleanor Frishman Trust 3350
Norma E. Fuccillo 3350
The Gen. Merch. Council 3350
Randolph E. Geoghan 1675
The Barbara M. Goldman Trust 3350
Selma Goodman 3350
Glenn L. and Brenda K. Gordon 3350
The Cleo E. Greer Trust 3350
Chris Hansen 1675
John N. and Jona Harvey 1675
Brian W. and Kimball Heath 3350
The Caroline A. Hemphill Trust 3350
James S. Hemphill 1675
James Bruce Herb 3350
Robert S. and Barbara J. Herb 3350
Edwin C. Higgison 3350
Jonathan B. and Leslie Watson Hill 3350
The Hopi Trust 1675
The Elizabeth L. Hunter Trust 1675
The Thomas A. James Trust 3350
E. Earl Jenkins Jr. 3350
FBO Christina Jensen 3350
Wade A. Kennedy 3350
James A. Kirk 6700
James P. and Teri Krainson 1675
Surender V. Kumar 3350
Mark Kutner 3350
George L. Lafferty Jr. 1675
Lyman Leathers 1675
Edna E. Leeman 3350
Bonnie H. Leman 3350
Richard Levenstein 1675
The Linda S. Liebowitz Trust 3350
Thomas Linton 3350
Lothlorien Partners 10050
Julia A. Luehrs 1675
Alice Lee Lund 3350
Barbara McCafferty 6700
Jeanette M. McDonald 3350
Sandra G. McGovern 1675
Patrick J. McMahon 3350
George L. Merkert Jr. 1675
Stanley Metalitz 5025
Earl P. Morgan 837.5
FBO Earl P. Morgan IRA 1675
Borue H. O'Brien 3350
The John B. Otting Trust #1 3350
Carl T. and Karen S. Peak 6700
The Frank A. Pettrone TBPP 3350
Penelope J. Pistilli 3350
The Clarence L. Razer Family Trust 1675
The John DeKiewiet Ross Trust 3350
Tom L. and Ruth H. Ross 1675
Milton B. Satcher 1675
John P. and Elva D. Schuler 3350
Jolanta G. Schwartzman 3350
Joseph D. and Jolanta G. Schwartzman 3350
Richard B. Sharpe 1675
The Anne E. Sheline Trust 3350
The Carlos A. Silva 3350
James H. Skiles III and Lynne H. Church 3350
Allen T. Smith 3350
The Charles & Juanita Smith Trust #1 1675
Steven R. and Georgene E. Smith 3350
Larry Snell 3350
Karen A. Snyder 3350
The Elisabeth S. Sparks Trust 6700
Dr. Eva Sperk 3350
Michael Spurlock 3350
Alan E. Stachel 1675
Thomas D. and Kathy C. Stang 3350
Allan J. Stein 3350
Peter R. Stickells 1675
Richmond B. and Chanetta P. Terrell 1675
The Tripp Family CR Trust 3350
Richard B. and Diana R. Trout 3350
The VA Radiological Asc PSP 2512.5
Richard and Rita Vadney 3350
Betty L. Waldron 3350
The Denese S. Weiss Trust 3350
Mitzi M. Wertheim 3350
The Yolanda Wolpert Trust 1675
Patricia Worthington 1675
D. Bryan and Jane S. Young 3350
TOTAL 372,687.50
Because the Selling Stockholders may sell all or a part
of their shares of Class A Common Stock offered hereby, no
estimate can be given as to the number of shares of Class A
Common Stock that will be held by any Selling Stockholder
upon termination of any offering made hereby.
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale from time
to time by the Selling Stockholders of up to 372,688 shares
of Class A Common Stock. Such sales may be made on the NYSE,
or such other national securities exchange or automated
interdealer quotation system on which shares of Class A
Common Stock are then listed, through negotiated transac-
tions or otherwise at market prices prevailing at the time
of the sale or at negotiated prices. Some or all of the
shares of Class A Common Stock may be sold through brokers
acting on behalf of the Selling Stockholders or to dealers
for resale by such dealers. In connection with such sales,
such brokers and dealers may receive compensation in the
form of discounts or commissions from the Selling Stockhold-
ers and may receive commissions from the purchasers of such
shares for whom they act as broker or agent (which discounts
and commissions are not anticipated to exceed those custom-
ary in the types of transactions involved). If necessary, a
supplemental Prospectus will describe the method of sale in
greater detail. In effecting sales, brokers or dealers
engaged by the Selling Stockholders and/or purchasers of the
Class A Common Stock may arrange for other brokers or deal-
ers to participate.
The Company has agreed to pay all expenses in connec-
tion with the registration and sale of the Class A Common
Stock being offered hereby. The Selling Stockholders will
pay all selling expenses, including discounts or commissions
payable to brokers or dealers.
The Selling Stockholders and any underwriter, broker or
dealer who acts in connection with the sale of the Class A
Common Stock hereunder may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act,
and any compensation received by them and any profit on any
resale of the Class A Common Stock as principals may be
deemed to be underwriting discounts and commissions under
the Securities Act.
In order to comply with the securities laws of certain
jurisdictions, the securities offered hereby will be offered
or sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain juris-
dictions the securities offered hereby may not be offered or
sold unless they have been registered or qualified for sale
in such jurisdictions or an exemption from registration or
qualification is available and is complied with.
Pursuant to a Registration Agreement among the Company
and the Selling Stockholders, the Company has agreed to
indemnify the Selling Stockholders, each of their respective
officers and directors and any person who controls such
Selling Stockholders, against certain liabilities and ex-
penses arising out of or based upon the information set
forth or incorporated by reference in this Prospectus, and
the Registration Statement of which this Prospectus is a
part, including liabilities under the Securities Act.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary of material Federal income tax
considerations regarding an investment in Securities of the
Company is based on current law, is for general information
only and is not tax advice. This discussion does not purport
to deal with all aspects of taxation that may be relevant to
particular investors in light of their personal investment
or tax circumstances, or, except to the extent discussed
under the headings "Taxation of Tax-Exempt Stockholders" and
"Taxation of Non-U.S. Stockholders," to certain types of
investors (including insurance companies, tax-exempt organi-
zations, financial institutions or broker-dealers, foreign
corporations and persons who are not citizens or residents
of the United States) that are subject to special treatment
under the federal income tax laws.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT HIS
OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO
HIM OF THE PURCHASE, OWNERSHIP AND SALE OF THE SECURITIES
AND OF THE COMPANY'S ELECTION TO BE TAXED AS A REAL ESTATE
INVESTMENT TRUST, INCLUDING THE FEDERAL, STATE, LOCAL, AND
FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE,
OWNERSHIP, SALE AND ELECTION, AND OF POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
TAXATION OF THE COMPANY
General. The REIT provisions of the Code are highly
technical and complex. The following sets forth the material
aspects of the provisions of the Code that govern the Feder-
al income tax treatment of a REIT and its stockholders. This
summary is qualified in its entirety by the applicable Code
provisions, rules and regulations promulgated thereunder,
and administrative and judicial interpretations thereof, all
of which are subject to change which may apply retroactive-
ly.
The Company has elected to be taxed as a REIT under the
Code commencing with its taxable year ending December 31,
1994, and the Company intends to continue to operate in such
a manner. In the opinion of Skadden, Arps, Slate, Meagher &
Flom, commencing with the Company's taxable year ending
December 31, 1994, the Company was organized in conformity
with the requirements for qualification as a REIT, and its
proposed method of operation, and its actual method of
operation since formation, will enable it to meet the re-
quirements for qualification and taxation as a REIT under
the Code. It must be emphasized that this opinion is based
and conditioned upon certain assumptions and representations
made by the Company as to factual matters (including repre-
sentations of the Company concerning its business and prop-
erties as set forth in this Prospectus). The opinion is
expressed as of its date, and Skadden, Arps, Slate,
Meagher & Flom has no obligation to advise holders of Secu-
rities of any subsequent change in the matters stated,
represented or assumed or any subsequent change in the
applicable law. Moreover, such qualification and taxation as
a REIT depends upon the Company's ability to meet, through
actual annual operating results, distribution levels and
diversity of stock ownership, the various qualification
tests imposed under the Code as discussed below, the results
of which will not be reviewed by Skadden, Arps, Slate,
Meagher & Flom. Accordingly, no assurance can be given that
the actual results of the Company's operation for any one
taxable year will satisfy such requirements. See "-- Failure
to Qualify." An opinion of counsel is not binding on the
IRS, and no assurance can be given that the Service will not
challenge the Company's eligibility for taxation as a REIT.
If the Company qualifies for taxation as a REIT, it
generally will not be subject to federal corporate income
tax on its net income that is currently distributed to
stockholders. This treatment substantially eliminates the
"double taxation" (at the corporate and stockholder levels)
that generally results from investment in a corporation.
However, the Company will be subject to federal income tax
as follows: First, the Company will be taxed at regular
corporate rates on any undistributed REIT taxable income,
including undistributed net capital gains. Second, under
certain circumstances, the Company may be subject to the
"alternative minimum tax" on its items of tax preference.
Third, if the Company has net income from prohibited trans-
actions (which are, in general, certain sales or other
dispositions of property held primarily for sale to custom-
ers in the ordinary course of business other than foreclo-
sure property), such income will be subject to a 100% tax.
Fourth, if the Company should fail to satisfy the 75% gross
income test or the 95% gross income test (as discussed
below), but has nonetheless maintained its qualification as
a REIT because certain other requirements have been met, it
will be subject to a 100% tax on an amount equal to (a) the
gross income attributable to the greater of the amount by
which the Company fails the 75% or 95% test multiplied by
(b) a fraction intended to reflect the Company's profitabil-
ity. Fifth, if the Company should fail to distribute during
each calendar year at least the sum of (i) 85% of its REIT
ordinary income for such year, (ii) 95% of its REIT capital
gain net income for such year, and (iii) any undistributed
taxable income from prior periods, the Company would be
subjected to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. In
addition, the Company could also be subject to tax in cer-
tain situations and on certain transactions not presently
contemplated.
Requirements for Qualification. The Code defines a
REIT as a corporation, trust or association (1) that is
managed by one or more trustees or directors; (2) the bene-
ficial ownership of which is evidenced by transferable
shares, or by transferable certificates of beneficial inter-
est; (3) which would be taxable as a domestic corporation,
but for the special Code provisions applicable to REITs;
(4) that is neither a financial institution nor an insurance
company subject to certain provisions of the Code; (5) the
beneficial ownership of which is held by 100 or more per-
sons; (6) in which, during the last half of each taxable
year, not more than 50% in value of the outstanding stock is
owned, directly or indirectly, by five or fewer individuals
(as defined in the Code to include certain entities); and
(7) which meets certain other tests described below (includ-
ing with respect to the nature of its income and assets).
The Code provides that conditions (1) through (4) must be
met during the entire taxable year, and that condition
(5) must be met during at least 335 days of a taxable year
of 12 months, or during a proportionate part of a taxable
year of less than 12 months. The Company's Articles of
Incorporation provide certain restrictions regarding trans-
fers of its shares, which provisions are intended to assist
the Company in continuing to satisfy the share ownership
requirements described in conditions (5) and (6) above.
To monitor the Company's compliance with the share
ownership requirements, the Company is required to maintain
records regarding the actual ownership of its shares. To do
so, the Company must demand written statements each year
from the record holders of certain percentages of its stock
in which the record holders are to disclose the actual
owners of the shares (i.e., the persons required to include
in gross income the REIT dividends). A list of those persons
failing or refusing to comply with this demand must be
maintained as part of the Company's records. A stockholder
who fails or refuses to comply with the demand must submit a
statement with its tax return disclosing the actual owner-
ship of the shares and certain other information.
In addition, a corporation may not elect to become a
REIT unless its taxable year is the calendar year. The
Company satisfies this requirement.
Ownership of Partnership Interests. In the case of a
REIT that is a partner in a partnership, regulations provide
that the REIT is deemed to own its proportionate share of
the partnership's assets and to earn its proportionate share
of the partnership's income. In addition, the assets and
gross income of the partnership retain the same character in
the hands of the REIT for purposes of the gross income and
asset tests applicable to REITs as described below. Thus,
the Company's proportionate share of the assets, liabilities
and items of income of the Partnerships will be treated as
assets, liabilities and items of income of the Company for
purposes of applying the REIT requirements described herein.
A summary of certain rules governing the Federal income
taxation of partnerships and their partners is provided
below in "Tax Aspects of the Company's Investments in Part-
nerships."
Income Tests. In order to maintain qualification as a
REIT, the Company annually must satisfy three gross income
requirements. First, at least 75% of the Company's gross
income (excluding gross income from "prohibited transac-
tions," i.e., certain sales of property held primarily for
sale to customers in the ordinary course of business) for
each taxable year must be derived directly or indirectly
from investments relating to real property or mortgages on
real property (including "rents from real property" and, in
certain circumstances, interest) or from certain types of
temporary investments. Second, at least 95% of the Company's
gross income (excluding gross income from prohibited trans-
actions) for each taxable year must be derived from such
real property investments, and from other dividends, inter-
est and gain from the sale or disposition of stock or secu-
rities (or from any combination of the foregoing). Third,
short-term gain from the sale or other disposition of stock
or securities, gain from certain sales of property held
primarily for sale, and gain on the sale or other disposi-
tion of real property held for less than four years (apart
from involuntary conversions and sales of foreclosure prop-
erty) must, in the aggregate, represent less than 30% of the
Company's gross income for each taxable year.
Rents received by the Company through the Partnerships
will qualify as "rents from real property" in satisfying the
gross income requirements described above, only if several
conditions are met, including the following. If rent attrib-
utable to personal property leased in connection with a
lease of real property is greater than 15% of the total rent
received under the lease, then the portion of rent attribut-
able to such personal property will not qualify as "rents
from real property." Moreover, for rents received to qualify
as "rents from real property," the REIT generally must not
operate or manage the property or furnish or render services
to the tenants of such property, other than through an
"independent contractor" from which the REIT derives no
revenue. However, the Company (or its affiliates) are per-
mitted to, and do directly perform services that are "usual-
ly or customarily rendered" in connection with the rental of
space for occupancy only and are not otherwise considered
rendered to the occupant of the property.
The Management Subsidiaries will receive management
fees and other income. A portion of such fees and other
income will accrue to the Company through the Operating
Partnership's general partnership interest in PAMS LP. Such
fee and other income generally will not qualify under the
95% gross income test. The Company also expects to indirect-
ly receive distributions from the Management Subsidiaries
through PAMS Inc. that will be classified as dividend income
to the extent of the earnings and profits of PAMS Inc. Such
distributions will qualify under the 95% gross income test
but not under the 75% gross income test.
If the Company fails to satisfy one or both of the 75%
or 95% gross income tests (though not the 30% gross income
test) for any taxable year, it may nevertheless qualify as a
REIT for such year if it is entitled to relief under certain
provisions of the Code. These relief provisions will be
generally available if the Company's failure to meet such
tests was due to reasonable cause and not due to willful
neglect, the Company attaches a schedule of the sources of
its income to its return, and any incorrect information on
the schedule was not due to fraud with intent to evade tax.
It is not possible, however, to state whether in all circum-
stances the Company would be entitled to the benefit of
these relief provisions. If these relief provisions are
inapplicable to a particular set of circumstances involving
the Company, the Company will not qualify as a REIT. As
discussed above in "-- General," even where these relief
provisions apply, a tax is imposed with respect to the
excess net income.
Asset Tests. The Company, at the close of each quarter
of its taxable year, must also satisfy three tests relating
to the nature of its assets. First, at least 75% of the
value of the Company's total assets must be represented by
real estate assets (including its allocable share of real
estate assets held by the Partnerships), stock or debt
instruments held for not more than one year purchased with
the proceeds of a stock offering or long-term (at least five
years) debt offering of the Company, cash, cash items and
U.S. government securities. Second, not more than 25% of the
Company's total assets may be represented by securities
other than those in the 75% asset class. Third, of the
investments included in the 25% asset class, the value of
any one issuer's securities owned by the Company may not
exceed 5% of the value of the Company's total assets, and
the Company may not own more than 10% of any one issuer's
outstanding voting securities.
The Company indirectly owns interests in the Management
Subsidiaries. As set forth above, the ownership of more than
10% of the voting securities of any one issuer by a REIT is
prohibited by the asset tests. The Company believes that its
indirect ownership interest in PAMS Inc. qualifies under
these rules. Skadden, Arps, Slate, Meagher & Flom, in ren-
dering its opinion as to the qualification of the Company as
a REIT, has relied on representations of the Company as to
the value of the Operating Partnership's total assets and
the value of the Operating Partnership's interest in PAMS
Inc. No independent appraisals have been obtained to sup-
port the Company's conclusions as to the value of the Oper-
ating Partnership's interest in PAMS Inc., and this value is
subject to change in the future. Accordingly, there can be
no assurance that the Service will not contend that the
Operating Partnership's ownership interest in PAMS Inc.
disqualifies the Company from treatment as a REIT.
The Company's indirect interests in the Operating
Partnership and other Partnerships are held through wholly
owned corporate subsidiaries of the Company organized and
operated as "qualified REIT subsidiaries" within the meaning
of the Code. Qualified REIT subsidiaries are not treated as
separate entities from their parent REIT for Federal income
tax purposes. Instead, all assets, liabilities and items of
income, deduction and credit of each qualified REIT subsid-
iary are treated as assets, liabilities and items of the
Company. Each qualified REIT subsidiary therefore will not
be subject to Federal corporate income taxation, although it
may be subject to state or local taxation. In addition, the
Company's ownership of the voting stock of each qualified
REIT subsidiary does not violate the general restriction
against ownership of more than 10% of the voting securities
of any issuer.
Annual Distribution Requirements. The Company, in
order to qualify as a REIT, is required to distribute divi-
dends (other than capital gain dividends) to its stockhold-
ers in an amount at least equal to (A) the sum of (i) 95% of
the Company's "REIT taxable income" (computed without regard
to the dividends paid deduction and the Company's net capi-
tal gain) and (ii) 95% of the net income (after tax), if
any, from foreclosure property, minus (B) the sum of certain
items of noncash income. Such distributions must be paid in
the taxable year to which they relate, or in the following
taxable year if declared before the Company timely files its
tax return for such year and if paid with or before the
first regular dividend payment after such declaration. To
the extent that the Company does not distribute all of its
net capital gain or distributes at least 95%, but less than
100%, of its "REIT taxable income," as adjusted, it will be
subject to tax thereon at the capital gains or ordinary
corporate tax rates, as the case may be. Furthermore, if the
Company should fail to distribute during each calendar year
at least the sum of (i) 85% of its REIT ordinary income for
such year, (ii) 95% of its REIT capital gain income for such
year, and (iii) any undistributed taxable income from prior
periods, the Company would be subject to a 4% excise tax on
the excess of such required distribution over the amounts
actually distributed. The Company believes that it has made,
and intends to make, timely distributions sufficient to
satisfy this annual distribution requirement.
It is possible that the Company, from time to time, may
not have sufficient cash or other liquid assets to meet the
95% distribution requirement due to timing differences
between (i) the actual receipt of income (including receipt
of distributions from the Operating Partnership) and actual
payment of deductible expenses and (ii) the inclusion of
such income and deduction of such expenses in arriving at
taxable income of the Company. In the event that such timing
differences occur, in order to meet the 95% distribution
requirement, the Company may find it necessary to arrange
for short-term, or possibly long-term, borrowings or to pay
dividends in the form of taxable distributions of property.
Under certain circumstances, the Company may be able to
rectify a failure to meet the distribution requirement for a
year by paying "deficiency dividends" to stockholders in a
later year, which may be included in the Company's deduction
for dividends paid for the earlier year. Thus, the Company
may be able to avoid being taxed on amounts distributed as
deficiency dividends; however, the Company will be required
to pay interest based on the amount of any deduction taken
for deficiency dividends.
Failure to Qualify. If the Company fails to qualify
for taxation as a REIT in any taxable year, and the relief
provisions do not apply, the Company will be subject to tax
(including any applicable alternative minimum tax) on its
taxable income at regular corporate rates. Distributions to
stockholders in any year in which the Company fails to
qualify will not be deductible by the Company nor will they
be required to be made. In such event, to the extent of
current and accumulated earnings and profits, all distribu-
tions to stockholders will be taxable as ordinary income,
and, subject to certain limitations of the Code, corporate
distributees may be eligible for the dividends received
deduction. Unless entitled to relief under specific statuto-
ry provisions, the Company will also be disqualified from
taxation as a REIT for the four taxable years following the
year during which qualification was lost. It is not possible
to state whether in all circumstances the Company would be
entitled to such statutory relief.
TAX ASPECTS OF THE COMPANY'S INVESTMENTS IN PARTNERSHIPS
General. Substantially all of the Company's invest-
ments are held indirectly through the Operating Partnership.
In general, partnerships are "pass-through" entities that
are not subject to Federal income tax. Rather, partners are
allocated their proportionate shares of the items of income,
gain, loss, deduction and credit of a partnership, and are
potentially subject to tax thereon, without regard to wheth-
er the partners receive a distribution from the partnership.
The Company will include in its income its proportionate
share of the foregoing partnership items for purposes of the
various REIT income tests and in the computation of its REIT
taxable income. Moreover, for purposes of the REIT asset
tests, the Company will include its proportionate share of
assets held by the Partnerships. See "-- Taxation of the
Company -- Ownership of Partnership Interests."
Entity Classification. The Company's direct and indi-
rect investment in partnerships involves special tax consid-
erations, including the possibility of a challenge by the
Service of the status of any of the Partnerships as a part-
nership (as opposed to an association taxable as a corpora-
tion) for Federal income tax purposes. If any of these
entities were treated as an association for Federal income
tax purposes, it would be taxable as a corporation and
therefore subject to an entity-level tax on its income. In
such a situation, the character of the Company's assets and
items of gross income would change and could preclude the
Company from satisfying the asset tests and the income tests
(see "-- Taxation of the Company -- Asset Tests" and "--
Taxation of the Company -- Income Tests"), and in turn could
prevent the Company from qualifying as a REIT. See "--
Taxation of the Company -- Failure to Qualify" above for a
discussion of the effect of the Company's failure to meet
such tests for a taxable year. In addition, any change in
the status of any of the Partnerships for tax purposes might
be treated as a taxable event, in which case the Company
might incur a tax liability without any related cash distri-
butions.
In the opinion of Skadden, Arps, Slate, Meagher & Flom,
which opinion is based upon certain assumptions and repre-
sentations by the Company and on opinions of local counsel
with respect to matters of local law, each of the Partner-
ships will be treated as a partnership for Federal income
tax purposes. The opinion is expressed as of its date and
Skadden, Arps, Slate, Meagher & Flom has no obligation to
advise holders of Class A Common Stock of any subsequent
change in the matters stated, represented or assumed or any
subsequent change in the applicable law. An opinion of
counsel, however, is not binding on the Service, and no
assurance can be given that the Service will not challenge
the status of these entities as partnerships for Federal
income tax purposes.
Tax Allocations with Respect to the Properties. Pursu-
ant to the Code and the regulations thereunder, income,
gain, loss and deduction attributable to appreciated or
depreciated property that is contributed to a partnership in
exchange for an interest in the partnership must be allocat-
ed in a manner such that the contributing partner is charged
with, or benefits from, respectively, the unrealized gain or
unrealized loss associated with the property at the time of
the contribution. The amount of such unrealized gain or
unrealized loss is generally equal to the difference between
the fair market value of contributed property at the time of
contribution, and the adjusted tax basis of such property at
the time of contribution (a "Book-Tax Difference"). Such
allocations are solely for Federal income tax purposes and
do not affect the book capital accounts or other economic or
legal arrangements among the partners. The Operating Part-
nership was formed by way of contributions of appreciated
property (including certain of the Owned Properties). Conse-
quently, allocations must be made in a manner consistent
with these requirements. Where a partner contributes cash to
a partnership that holds appreciated property, the Treasury
regulations provide for a similar allocation of such items
to the other partners. These rules apply to the contribution
by the Company to the Operating Partnership of the cash
proceeds received in any offerings of its stock.
In general, certain holders of OP Units will be allo-
cated lower amounts of depreciation deductions for tax
purposes and increased taxable income and gain on sale by
the Operating Partnership or the Property Partnerships of
the contributed Owned Properties. This will tend to elimi-
nate the Book-Tax Difference over the life of these partner-
ships. However, the special allocations do not always en-
tirely rectify the Book-Tax Difference on an annual basis or
with respect to a specific taxable transaction such as a
sale. Thus, the carryover basis of the contributed Owned
Properties in the hands of the Partnerships may cause the
Company to be allocated lower depreciation and other deduc-
tions, and possibly greater amounts of taxable income in the
event of a sale of such contributed assets in excess of the
economic or book income allocated to it as a result of such
sale. This may cause the Company to recognize taxable income
in excess of cash proceeds, which might adversely affect the
Company's ability to comply with the REIT distribution
requirements. See "-- Taxation of the Company -- Annual
Distribution Requirements."
With respect to any property purchased or to be pur-
chased by any of the Partnerships (other than through the
issuance of OP Units) subsequent to the formation of the
Company, such property will initially have a tax basis equal
to its fair market value and the special allocation provi-
sions described above will not apply.
Sale of the Properties. The Company's share of any
gain realized by the Operating Partnership or a Property
Partnership on the sale of any property held as inventory or
primarily for sale to customers in the ordinary course of
business will be treated as income from a prohibited trans-
action that is subject to a 100% penalty tax. See "-- Re-
quirements for Qualification -- Income Tests." Under exist-
ing law, whether property is held as inventory or primarily
for sale to customers in the ordinary course of a
partnership's trade or business is a question of fact that
depends on all the facts and circumstances with respect to
the particular transaction. The Operating Partnership and
the Property Partnerships intend to hold the Owned Proper-
ties for investment with a view to long-term appreciation,
to engage in the business of acquiring, developing, owning,
and operating the Owned Properties (and other apartment
properties) and to make such occasional sales of the Owned
Properties, including peripheral land, as are consistent
with the Company's investment objectives.
TAXATION OF MANAGEMENT SUBSIDIARIES
A portion of the amounts to be used to fund distribu-
tions to stockholders is expected to come from the Manage-
ment Subsidiaries, through dividends paid on the non-voting
preferred stock of PAMS Inc. held by the Operating Partner-
ship, distributions paid to the Operating Partnership as the
general partner of PAMS LP and interest paid by PAMS Inc. on
certain installment notes held by the Operating Partnership.
PAMS Inc. will not qualify as a REIT and will pay Federal,
state and local income taxes on its taxable income at normal
corporate rates. The Management Subsidiaries intend to claim
annual deductions for interest and amortization. No assur-
ance can be given that the Service will not challenge such
deductions. Any Federal, state or local income taxes that
PAMS Inc. is required to pay will reduce the Company's cash
flow from operating activities and its ability to make
payments to holders of its securities.
TAXATION OF TAXABLE DOMESTIC STOCKHOLDERS
General. As long as the Company qualifies as a REIT,
distributions made to the Company's taxable domestic stock-
holders out of current or accumulated earnings and profits
(and not designated as capital gain dividends) will be taken
into account by them as ordinary income and will not be
eligible for the dividends received deduction for corpora-
tions. Distributions that are designated as capital gain
dividends will be taxed as long-term capital gains (to the
extent that they do not exceed the Company's actual net
capital gain for the taxable year) without regard to the
period for which the stockholder has held its stock. Howev-
er, corporate stockholders may be required to treat up to
20% of certain capital gain dividends as ordinary income.
Distributions in excess of current and accumulated
earnings and profits will not be taxable to a stockholder to
the extent that they do not exceed the adjusted basis of the
stockholder's shares, but rather will reduce the adjusted
basis of such shares. To the extent that such distributions
exceed the adjusted basis of a stockholder's shares, they
will be included in income as long-term capital gain (or
short-term capital gain if the shares have been held for one
year or less) provided that the shares are a capital asset
in the hands of the stockholder. In addition, any dividend
declared by the Company in October, November or December of
any year and payable to a stockholder of record on a speci-
fied date in any such month shall be treated as both paid by
the Company and received by the stockholder on December 31
of such year, provided that the dividend is actually paid by
the Company during January of the following calendar year.
Stockholders may not include in their individual income tax
returns any net operating losses or capital losses of the
Company.
In general, any loss upon a sale or exchange of shares
by a stockholder who has held such shares for six months or
less (after applying certain holding period rules) will be
treated as a long-term capital loss to the extent of distri-
butions from the Company required to be treated by such
stockholder as long-term capital gain.
TAXATION OF TAX-EXEMPT STOCKHOLDERS
Based upon a published ruling by the IRS, distributions
by the Company to a stockholder that is a tax-exempt entity
will not constitute "unrelated business taxable income"
("UBTI"), provided that the tax-exempt entity has not fi-
nanced the acquisition of its shares with "acquisition
indebtedness" within the meaning of the Code and the shares
are not otherwise used in an unrelated trade or business of
the tax-exempt entity.
Notwithstanding the preceding paragraph, however, a
portion of the dividends paid by the Company may be treated
as UBTI to certain domestic private pension trusts if the
Company is treated as a "pension-held REIT." The Company
believes that it is not, and does not expect to become, a
"pension-held REIT." If the Company were to become a
pension-held REIT, these rules generally would only apply to
certain pension trusts that hold more than 10% of the
Company's stock.
TAXATION OF FOREIGN STOCKHOLDERS
The following is a discussion of certain anticipated
U.S. Federal income and estate tax consequences of the
ownership and disposition of the Company's stock applicable
to Non-U.S. Holders of such stock. A "Non-U.S. Holder" is
any person other than (i) a citizen or resident of the
United States, (ii) a corporation or partnership created or
organized in the United States or under the laws of the
United States or of any state thereof, or (iii) an estate or
trust whose income is includable in gross income for U.S.
Federal income tax purposes regardless of its source. The
discussion is based on current law and is for general infor-
mation only. The discussion addresses only certain and not
all aspects of U.S. Federal income and estate taxation.
Ordinary Dividends. The portion of dividends received
by Non-U.S. Holders payable out of the Company's earnings
and profits which are not attributable to capital gains of
the Company and which are not effectively connected with a
U.S. trade or business of the Non-U.S. Holder will be sub-
ject to U.S. withholding tax at the rate of 30% (unless
reduced by treaty). In general, Non-U.S. Holders will not be
considered engaged in a U.S. trade or business solely as a
result of their ownership of stock of the Company. In cases
where the dividend income from a Non-U.S. Holder's invest-
ment in stock of the Company is (or is treated as) effec-
tively connected with the Non-U.S. Holder's conduct of a
U.S. trade or business, the Non-U.S. Holder generally will
be subject to U.S. tax at graduated rates, in the same
manner as U.S. stockholders are taxed with respect to such
dividends (and may also be subject to the 30% branch profits
tax in the case of a Non-U.S. Holder that is a foreign
corporation).
Non-Dividend Distributions. Distributions by the
Company which are not dividends out of the earnings and
profits of the Company will not be subject to U.S. income or
withholding tax. If it cannot be determined at the time a
distribution is made whether or not such distribution will
be in excess of current and accumulated earnings and prof-
its, the distribution will be subject to withholding at the
rate applicable to dividends. However, the Non-U.S. Holder
may seek a refund of such amounts from the IRS if it is
subsequently determined that such distribution was, in fact,
in excess of current and accumulated earnings and profits of
the Company.
Capital Gain Dividends. Under the Foreign Investment
in Real Property Tax Act of 1980 ("FIRPTA"), a distribution
made by the Company to a Non-U.S. Holder, to the extent
attributable to gains from dispositions of United States
Real Property Interests ("USRPIs") such as the properties
beneficially owned by the Company ("USRPI Capital Gains"),
will be considered effectively connected with a U.S. trade
or business of the Non-U.S. Holder and subject to U.S.
income tax at the rate applicable to U.S. individuals or
corporations, without regard to whether such distribution is
designated as a capital gain dividend. In addition, the
Company will be required to withhold tax equal to 35% of the
amount of dividends to the extent such dividends constitute
USRPI Capital Gains. Distributions subject to FIRPTA may
also be subject to a 30% branch profits tax in the hands of
a foreign corporate stockholder that is not entitled to
treaty exemption.
Disposition of Stock of the Company. Unless the
Company's stock constitutes a USRPI, a sale of such stock by
a Non-U.S. Holder generally will not be subject to U.S.
taxation under FIRPTA. The stock will not constitute a USRPI
if the Company is a "domestically controlled REIT." A domes-
tically controlled REIT is a REIT in which, at all times
during a specified testing period, less than 50% in value of
its shares is held directly or indirectly by Non-U.S. Hold-
ers. The Company believes that it is, and it expects to
continue to be a domestically controlled REIT, and therefore
that the sale of the Company's stock will not be subject to
taxation under FIRPTA. Because the Company's stock will be
publicly traded, however, no assurance can be given the
Company will continue to be a domestically controlled REIT.
If the Company does not constitute a domestically
controlled REIT, a Non-U.S. Holder's sale of stock generally
will still not be subject to tax under FIRPTA as a sale of a
USRPI provided that (i) the stock is "regularly traded" (as
defined by applicable Treasury regulations) on an estab-
lished securities market (e.g., the NYSE, on which the
Company's Class A Common Stock is listed) and (ii) the
selling Non-U.S. Holder held 5% or less of the Company's
out-standing stock at all times during a specified testing
period.
If gain on the sale of stock of the Company were sub-
ject to taxation under FIRPTA, the Non-U.S. Holder would be
subject to the same treatment as a U.S. stockholder with
respect to such gain (subject to applicable alternative
minimum tax and a special alternative minimum tax in the
case of nonresident alien individuals) and the purchaser of
the stock could be required to withhold 10% of the purchase
price and remit such amount to the Service.
Capital gains not subject to FIRPTA will nonetheless be
taxable in the United States to a Non-U.S. Holder in two
cases: (i) if the Non-U.S. Holder's investment in the stock
of the Company is effectively connected with a U.S. trade or
business conducted by such Non-U.S. holder, the Non-U.S.
Holder will be subject to the same treatment as a U.S.
stockholder with respect to such gain, or (ii) if the
Non-U.S. Holder is a nonresident alien individual who was
present in the United States for 183 days or more during the
taxable year and has a "tax home" in the United States, the
nonresident alien individual will be subject to a 30% tax on
the individual's capital gain.
Estate Tax. Stock of the Company owned or treated as
owned by an individual who is not a citizen or resident (as
specially defined for U.S. Federal estate tax purposes) of
the United States at the time of death will be includable in
the individual's gross estate for U.S. Federal estate tax
purposes, unless an applicable estate tax treaty provides
otherwise. Such individual's estate may be subject to U.S.
Federal estate tax on the property includable in the estate
for U.S. Federal estate tax purposes.
Information Reporting and Backup Withholding. The
Company must report annually to the Service and to each
Non-U.S. Holder the amount of dividends (including any
capital gain dividends) paid to, and the tax withheld with
respect to, each Non-U.S. Holder. These reporting require-
ments apply regardless of whether withholding was reduced or
eliminated by an applicable tax treaty. Copies of these
returns may also be made available under the provisions of a
specific treaty or agreement with the tax authorities in the
country in which the Non-U.S. Holder resides.
U.S. backup withholding (which generally is imposed at
the rate of 31% on certain payments to persons that fail to
furnish the information required under the U.S. information
reporting requirements) and information reporting will
generally not apply to dividends (including any capital gain
dividends) paid on stock of the Company to a Non-U.S. Holder
at an address outside the United States.
The payment of the proceeds from the disposition of
stock of the Company to or through a U.S. office of a broker
will be subject to information reporting and backup with-
holding unless the owner, under penalties of perjury, certi-
fies, among other things, its status as a Non-U.S. Holder,
or otherwise establishes an exemption. The payment of the
proceeds from the disposition of stock to or through a
non-U.S. office of a non-U.S. broker generally will not be
subject to backup withholding and information reporting.
Backup withholding is not an additional tax. Any
amounts withheld under the backup withholding rules will be
refunded or credited against the Non-United States Holder's
United States Federal income tax liability, provided that
the required information is furnished to the Service.
These information reporting and backup withholding
rules are under review by the U.S. Treasury and their
application to the Class A Common Stock could be changed by
future regulations. On April 15, 1996, the Service issued
proposed Treasury Regulations concerning the withholding of
tax and reporting for certain amounts paid to non-resident
individuals and foreign corporations. The proposed Treasury
Regulations, if adopted in their present form, would be
effective for payments made after December 31, 1997. Pro-
spective purchasers should consult their tax advisors con-
cerning the potential adoption of such proposed Treasury
Regulations and the potential effect on their ownership of
Class A Common Stock.
OTHER TAX CONSEQUENCES
Possible Legislative or Other Actions Affecting Tax
Consequences. Prospective holders of Class A Common Stock
or other securities of the Company should recognize that the
present Federal income tax treatment of an investment in the
Company may be modified by legislative, judicial or adminis-
trative action at any time, and that any such action may
affect investments and commitments previously made. The
rules dealing with Federal income taxation are constantly
under review by persons involved in the legislative process
and by the Service and the U.S. Treasury Department, result-
ing in revisions of regulations and revised interpretations
of established concepts as well as statutory changes. Revi-
sions in Federal tax laws and interpretations thereof could
adversely affect the tax consequences of an investment in
the Company.
State and Local Taxes. The Company and its stockhold-
ers may be subject to state or local taxation in various
state or local jurisdictions, including those in which it or
they transact business or reside. The state and local tax
treatment of the Company and its stockholders may not con-
form to the Federal income tax consequences discussed above.
Consequently, prospective stockholders should consult their
own tax advisors regarding the effect of state and local tax
laws on an investment in the Company.
LEGAL MATTERS
Certain tax matters will be passed upon for the Company
by Skadden, Arps, Slate, Meagher & Flom, Los Angeles, Cali-
fornia. The validity of the Class A Common Stock offered
hereby will be passed upon for the Company by Piper &
Marbury L.L.P., Baltimore, Maryland. Certain matters as to
Maryland law will be passed upon for the Company by Piper &
Marbury L.L.P. Certain matters as to Florida law will be
passed upon for the Company by Shumaker, Loop & Kendrick,
Tampa, Florida.
EXPERTS
The consolidated financial statements of Apartment
Investment and Management Company and the combined financial
statements of the AIMCO Predecessors included in Apartment
Investment and Management Company's Annual Report on
Form 10-K for the year ended December 31, 1995 have been
audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorpo-
rated herein by reference. Such consolidated and combined
financial statements have been incorporated herein by refer-
ence in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
The combined statement of revenues and certain expenses
of the GECC Properties (as defined in the notes thereto)
included in Apartment Investment and Management Company's
Current Report on Form 8-K dated December 29, 1995 (as
amended), has been audited by Arthur Andersen LLP, indepen-
dent public accountants, as indicated in their report there-
on included therein and incorporated herein by reference.
The statement of revenues and certain expenses of the
Peachtree Park Apartments included in Apartment Investment
and Management Company's Current Report on Form 8-K dated
January 1, 1996, has been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report
thereon included therein and incorporated herein by refer-
ence. Such statements have been incorporated herein by
reference in reliance upon the authority of said firm as
experts in accounting and auditing in giving said report.
Any financial statements and schedules hereafter filed
by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act and incorporated by reference in
this Prospectus that have been examined and are the subject
of a report by independent accountants will be so incorpo-
rated herein by reference in reliance upon such reports
given and upon the authority of such firms as experts in
accounting and auditing to the extent covered by consents
filed with the Commission.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTIONS.
The estimated expenses (all of which are to be paid by
the Company), other than underwriting discounts and commis-
sions, in connection with the offering of the Class A Common
Stock, are as follows:
Registration Fee -- Securities and Exchange Com-
mission . . . . . . . . . . . . . . . . . . . . 2,442
Printing and Engraving Expenses . . . . . . . . . 5,000
Legal Fees and Expenses (other than Blue Sky) . . 10,000
Accounting Fees and Expenses . . . . . . . . . . 3,000
Blue Sky Fees and Expenses (including fees of
counsel) . . . . . . . . . . . . . . . . . . . 12,000
Miscellaneous . . . . . . . . . . . . . . . . . . 1,000
TOTAL . . . . . . . . . . . . . . . . . . . 33,442
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation limit the
liability of the Company's directors and officers to the
Company and its stockholders to the fullest extent permitted
from time to time by Maryland law. Maryland law presently
permits the liability of directors and officers to a corpo-
ration or its stockholders for money damages to be limited,
except (i) to the extent that it is proved that the director
or officer actually received an improper benefit or profit
in money, property or services for the amount of the benefit
or profit in money, property or services actually received,
or (ii) if a judgment or other final adjudication is entered
in a proceeding based on a finding that the director's or
officer's action, or failure to act, was the result of
active and deliberate dishonesty and was material to the
cause of action adjudicated in the proceeding. This provi-
sion does not limit the ability of the Company or its stock-
holders to obtain other relief, such as an injunction or
rescission.
The Company's Articles of Incorporation and Bylaws
require the Company to indemnify its directors, officers and
certain other parties to the fullest extent permitted from
time to time by Maryland law. The MGCL permits a corporation
to indemnify its directors, officers and certain other
parties against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by them in connection
with any proceeding to which they may be made a party by
reason of their service to or at the request of the corpora-
tion, unless it is established that (i) the act or omission
of the indemnified party was material to the matter giving
rise to the proceeding and (x) was committed in bad faith or
(y) was the result of active and deliberate dishonesty,
(ii) the indemnified party actually received an improper
personal benefit in money, property or services or (iii) in
the case of any criminal proceeding, the indemnified party
had reasonable cause to believe that the act or omission was
unlawful. Indemnification may be made against judgments,
penalties, fines, settlements and reasonable expenses actu-
ally incurred by the director or officer in connection with
the proceeding; provided, however, that if the proceeding is
one by or in the right of the corporation, indemnification
may not be made with respect to any proceeding in which the
director or officer has been adjudged to be liable to the
corporation. In addition, a director or officer may not be
indemnified with respect to any proceeding charging improper
personal benefit to the director or officer in which the
director or officer was adjudged to be liable on the basis
that personal benefit was improperly received. The termina-
tion of any proceeding by conviction, or upon a plea of nolo
contendere or its equivalent, or an entry of any order of
probation prior to judgment, creates a rebuttable presump-
tion that the director or officer did not meet the requisite
standard of conduct required for indemnification to be
permitted. It is the position of the Securities and Exchange
Commission that indemnification of directors and officers
for liabilities arising under the Securities Act is against
public policy and is unenforceable pursuant to Section 14 of
the Securities Act.
The Company has entered into agreements with
certain of its executive officers (Messrs. Considine,
Kompaniez, Ira and Lacy, and Ms. Morein and Ms. Heath),
pursuant to which the Company has agreed to indemnify such
executive officers to the fullest extent permitted by appli-
cable law.
The Agreement of Limited Partnership (the "Operat-
ing Partnership Agreement") of AIMCO Properties, L.P., a
Delaware limited partnership (the "Operating Partnership"),
also provides for indemnification of the Company, or any
director or officer of the Company, in its capacity as the
previous general partner of the Partnership, from and
against all losses, claims, damages, liabilities, joint or
several, expenses (including legal fees), fines, settlements
and other amounts incurred in connection with any actions
relating to the operations of the Operating Partnership, as
set forth in the Operating Partnership Agreement.
Section 2.8 of the Apartment Investment and Man-
agement Company 1996 Stock Award and Incentive Plan (the
"1996 Plan"), and Section 6.7 of The 1994 Stock Option Plan
of Apartment Investment and Management Company and Affili-
ates (the "1994 Plan"), specifically provide that, to the
fullest extent permitted by law, each of the members of the
Board of Directors of the Company (the "Board"), the Compen-
sation Committee of the Board and each of the directors,
officers and employees of the Company, any Company subsid-
iary, the Operating Partnership and any subsidiary of the
Operating Partnership shall be held harmless and indemnified
by the Company for any liability, loss (including amounts
paid in settlement), damages or expenses (including reason-
able attorneys' fees) suffered by virtue of any determina-
tions, acts or failures to act, or alleged acts or failures
to act, in connection with the administration of the 1996
Plan or the 1994 Plan, as the case may be, so long as such
person is not determined by a final adjudication to be
guilty of willful misconduct with respect to such determina-
tion, action or failure to act.
ITEM 16. EXHIBITS.
5.1 Opinion of Piper & Marbury L.L.P. regarding the
validity of the Class A Common Stock offered
hereby.
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom
regarding tax matters.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Piper & Marbury L.L.P. (included in
their opinion filed as Exhibit 5.1).
23.4 Consent of Skadden, Arps, Slate, Meagher & Flom
(included in their opinion filed as Exhibit 8.1).
23.5 Consent of Shumaker, Loop & Kendrick.
24 Power of Attorney (included on the signature page
hereof).
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by sec-
tion 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration state-
ment (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a funda-
mental change in the information set forth in the registra-
tion statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration state-
ment;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement
is on Form S-3, Form S-8 or Form F-3, and the informa-
tion required to be included in a post-effective amend-
ment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by
the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incor-
porated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being regis-
tered which remain unsold at the termination of the offer-
ing.
(b) The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securi-
ties Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Sec-
tion 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to direc-
tors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, there-
fore, unenforceable. In the event that a claim for indemni-
fication against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the regis-
trant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indem-
nification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of
such issue.
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Terry Considine and Peter Kompaniez his or her true and lawful attorney-in-
fact and agents, each acting alone, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign any or all amendments (including post-
effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, each acting alone, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, each acting alone, or his or her substitute or substi-
tutes, may lawfully do or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the regis-
trant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Regis-
tration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Denver, State of Colorado, on the 26th day
of July, 1996.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ Terry Considine
Terry Considine,
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Terry Considine Chairman of the Board, President and July 26, 1996
Terry Considine Chief Executive Officer (Principal
Executive Officer)
/s/ Leeann Morein Senior Vice President, Chief Finan- July 26, 1996
Leeann Morein cial Officer and Secretary (Princi-
pal Accounting Officer)
/s/ Patricia Heath Vice President and Chief Accounting July 26, 1996
Patricia Heath Officer (Principal Accounting Officer)
/s/ Peter K. Kompaniez Vice Chairman and Director July 26, 1996
Peter K. Kompaniez
/s/ Richard S. Ellwood Director July 26, 1996
Richard S. Ellwood
/s/ J. Landis Martin Director July 26, 1996
J. Landis Martin
/s/ Thomas L. Rhodes Director July 26,1996
Thomas L. Rhodes
/s/ John D. Smith Director July 26, 1996
John D. Smith
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NO.
5.1 Opinion of Piper & Marbury L.L.P. re-
garding the validity of the Class A
Common Stock offered hereby.
8.1 Opinion of Skadden, Arps, Slate,
Meagher & Flom regarding tax matters.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Piper & Marbury L.L.P. (in-
cluded in their opinion filed as Exhib-
it 5.1).
23.4 Consent of Skadden, Arps, Slate,
Meagher & Flom (included in their opin-
ion filed as Exhibit 8.1).
23.5 Consent of Shumaker, Loop & Kendrick.
24 Power of Attorney (included on the
signature page hereof).
EXHIBIT 5.1
Piper & Marbury L.L.P.
PIPER & MARBURY L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET
Baltimore, Maryland 21201-3018
410-539-2530 WASHINGTON
FAX: 410-539-0489 NEW YORK
PHILADELPHIA
EASTON
July 25, 1996
Apartment Investment and Management Company
1873 South Bellaire Street
Denver, Colorado 80222
Dear Sirs:
We have acted as special Maryland counsel to Apartment Investment and
Management Company, a Maryland corporation (the "Company"), in connection with
the Company's registration statement on Form S-3 filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Registration Statement") relating to the public offer and sale from time to
time of up to 372,688 shares (the "Shares") of the Company's Class A Common
Stock, par value $.01 per share.
The Shares were issued to the former stockholders of Somerset REIT, Inc.,
a Florida corporation, in connection with the acquisition by the Company of
Somerset REIT, Inc. pursuant to the Acquisition Agreement dated as of April
30, 1996 (the "Acquisition Agreement") by and among the Company, Somerset
REIT, Inc. and certain related parties. The Shares are being registered
pursuant to the Shareholder Registration Rights Agreement dated May 31, 1996
(the "Registration Rights Agreement") between the Company and Somerset REIT,
Inc. The Registration Rights Agreement was entered into in connection with the
Acquisition Agreement.
In our capacity as special Maryland counsel to the Company, we have
examined a copy of the form of the Acquisition Agreement, a copy of the form
of the Registration Rights Agreement, the Company's Charter and ByLaws, a good
standing certificate dated July 23, 1996 from the Maryland State Department of
Assessments and Taxation, the proceedings of the Board of Directors of the
Company relating to the execution and delivery of the Acquisition Agreement to
the issuance of the Shares, and to the preparation and filing of the
Registration Statement and such other statutes, certificates, instruments,
documents and matters of law relating to the Company as we have deemed
necessary to the issuance of this opinion. In such examination we have assumed
without independent investigation the genuineness of all signatures, the legal
capacity of all individuals who have executed any of the aforesaid documents,
the conformity of final documents in all material respects to the versions
thereof submitted to us in draft form, the authenticity of all documents
submitted to us as originals, the conformity with originals of all documents
submitted to us as copies, and that all public records reviewed are accurate
and complete.
Based upon the foregoing and limited in all respects to applicable
Maryland law, we are of the opinion and advise you that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland.
2. The Shares have been validly issued and are fully paid
and non-assessable.
The opinions expressed above are rendered to you in connection with the
Registration Statement, are solely for your benefit, and are not to be used,
circulated, quoted or otherwise referred to for any other purpose without our
express written consent. The opinions expressed above are limited to the law
of Maryland. All of the foregoing opinions are rendered as of the date hereof.
We assume no obligation to update such opinions to reflect any facts or
circumstances which may hereafter come to our attention or any changes in the
law which may hereafter occur.
Very truly yours,
Piper & Marbury, L.L.P.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
July 25, 1996
Apartment Investment and
Management Company
1873 South Bellaire Street
Suite 1700
Denver, Colorado 80222
Re: Certain Federal Income Tax Considerations
Dear Sirs:
You have requested our opinion concerning
certain Federal income tax considerations in connection
with an offering for sale, from time to time, of Class A
Common Stock (the "Offering") of Apartment Investment and
Management Company, a Maryland corporation ("AIMCO"), by
certain stockholders pursuant to the Registration State-
ment on Form S-3 filed with the Securities and Exchange
Commission on July 26, 1996 (the "Registration State-
ment"). Unless otherwise specifically defined herein,
all capitalized terms have the meanings assigned to them
in the Registration Statement.
In connection with the Offering, a previous
offering of Class A Common Stock by AIMCO that was com-
pleted on December 19, 1995 (including the exercise of
the over allotment option related thereto on December 29,
1995), and certain other matters, we have acted as coun-
sel to AIMCO, and we have assisted in the preparation of
the Registration Statement and certain other documents.
In formulating our opinion, we have reviewed the Regis-
tration Statement, the partnership agreements or organi-
zational documents (including any amendments thereof) for
each of the partnerships and limited liability companies
indicated on Exhibit A attached hereto in which AIMCO
holds a direct or indirect interest (the "Partnerships"),
and such other documentation and information provided by
you as is relevant to the Offering and necessary to
prepare the Registration Statement. In addition, you
have provided us with certain representations of officers
of AIMCO relating to, among other things, the actual and
proposed operation of AIMCO. For purposes of our opin-
ion, we have not made an independent investigation of the
facts set forth in such representations, the partnership
agreements and organizational documents for the Partner-
ships, the Registration Statement or any other document.
We have, consequently, relied on your representations
that the information presented in such documents or
otherwise furnished to us accurately and completely
describes all material facts relevant to our opinion. No
facts have come to our attention, however, that would
cause us to question the accuracy and completeness of
such facts or documents in a material way. We have also
relied upon the opinion of Piper & Marbury L.L.P. dated
July 25, 1996 with respect to certain matters of Maryland
law, and the opinion of Shumaker, Loop & Kendrick dated
October 18, 1995 with respect to certain matters of
Florida law.
In rendering our opinion, we have assumed that
the transactions contemplated by the foregoing documents
have been consummated in accordance with the operative
documents, and that such documents accurately reflect the
material facts of such transactions. In addition, our
opinion is based on the correctness of the following
specific assumptions: (i) each of AIMCO, the Partner-
ships, Property Asset Management Services, Inc., and any
"qualified REIT subsidiary" of AIMCO (within the meaning
of section 856(i)(2) of the Internal Revenue Code of
1986, as amended (the "Code")), has been and will contin-
ue to be operated in accordance with the laws of the
jurisdiction in which it was formed and in the manner
described in the relevant partnership agreement or other
organizational documents and in the Registration State-
ment; and (ii) there have been no changes in the applica-
ble laws of the State of Maryland or any other state
under the laws of which any of the Partnerships have been
formed. In rendering our opinion, we have also consid-
ered and relied upon the Code, the regulations promulgat-
ed thereunder by the Treasury Department (the "Regula-
tions"), administrative rulings and the other interpreta-
tions of the Code and the Regulations by the courts and
the Internal Revenue Service, all as they exist at the
date of this letter. With respect to the latter assump-
tion, it should be noted that statutes, regulations,
judicial decisions, and administrative interpretations
are subject to change at any time and, in some circum-
stances, with retroactive effect. Of course, a material
change which is made after the date hereof in any of the
foregoing bases for our opinion could affect our conclu-
sions.
We express no opinion as to the laws of any
jurisdiction other than the Federal laws of the United
States of America to the extent specifically referred to
herein.
Based on the foregoing, we are of the opinion
that:
1. Commencing with AIMCO's initial taxable
year ended December 31, 1994, AIMCO was organized in
conformity with the requirements for qualification as a
real estate investment trust ("REIT") under the Code, and
AIMCO's proposed method of operation, and its actual
method of operation since its formation, will enable it
to meet the requirements for qualification and taxation
as a REIT. As noted in the Registration Statement, the
qualification and taxation as a REIT depends upon AIMCO's
ability to meet, through actual annual operating results,
certain requirements, including requirements relating to
distribution levels and diversity of stock ownership, and
the various qualification tests imposed under the Code,
the results of which will not be reviewed by us. Accord-
ingly, no assurance can be given that the actual results
of AIMCO's operation for any one taxable year will satis-
fy such requirements.
2. Each of the Partnerships (i) will be
treated as a partnership for Federal income tax purposes
and not as an association taxable as a corporation, and
(ii) will not be a "publicly traded partnership" within
the meaning of Section 7704(b) of the Code.
3. Although the discussion in the Registra-
tion Statement under the heading "CERTAIN FEDERAL INCOME
TAX CONSIDERATIONS" does not purport to discuss all
possible Federal income tax consequences of the purchase,
ownership, and disposition of the Class A Common Stock,
such discussion, to the extent that it relates to matters
of law or legal conclusions, constitutes in all material
respects a fair and accurate summary of the Federal
income tax consequences of the purchase, ownership, and
disposition of the Class A Common Stock under current
law.
Other than as expressly stated above, we ex-
press no opinion on any issue relating to AIMCO, the
Partnerships, or to any investment therein.
This opinion is intended for the exclusive use
of the person to whom it is addressed, except as set
forth herein, and it may not be used, circulated, quoted
or relied upon for any other purpose without our prior
written consent. We consent to the filing of this opin-
ion as an exhibit to the Registration Statement and to
the references to Skadden, Arps, Slate, Meagher & Flom in
the Registration Statement. In giving this consent, we
do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules or
regulations of the Securities and Exchange Commission
thereunder. This opinion is expressed as of the date
hereof, and we disclaim any undertaking to advise you of
any subsequent changes of the matters stated, represent-
ed, or assumed herein or any subsequent changes in appli-
cable law.
Very truly yours,
Skadden, Arps, Slate, Meagher & Flom
Exhibit A
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
SUBSIDIARY PARTNERSHIPS
SUBSIDIARY PARTNERSHIPS AND GENERAL PARTNER OR MANAGING
LIMITED LIABILITY COMPANIES MEMBER
AIMCO/Bluffs, L.L.C., a Dela- AIMCO Holdings, L.P., a Dela-
ware limited liability company ware limited partnership
AIMCO/Boardwalk, L.P., a Dela- AIMCO Holdings, L.P., a Dela-
ware limited partnership ware limited partnership
AIMCO/Boardwalk Finance, L.P., AIMCO Holdings, L.P., a Dela-
a Delaware limited partnership ware limited partnership
AIMCO/Brandywine, L.P., a Del- AIMCO Holdings, L.P., a Dela-
aware limited partnership ware limited partnership
AIMCO/HIL, L.L.C., a Delaware AIMCO Holdings, L.P., a Dela-
limited liability company ware limited partnership
AIMCO Holdings, L.P., a Dela- AIMCO Holdings QRS, Inc., a
ware limited partnership Delaware corporation
AIMCO/Montecito, L.P., a Dela- AIMCO Holdings, L.P., a Dela-
ware limited partnership ware limited partnership
AIMCO/OTC L.L.C., a Delaware AIMCO Holdings, L.P., a Dela-
limited liability company ware limited partnership
AIMCO/OTC, L.P., a Delaware AIMCO Holdings, L.P., a Dela-
limited partnership ware limited partnership
AIMCO/PAM Properties, L.P., a AIMCO Properties, L.P., a Del-
Delaware limited partnership aware limited partnership
AIMCO/Penn Square, L.L.C., a AIMCO Holdings, L.P., a Dela-
Delaware limited liability ware limited partnership
company
AIMCO Properties, L.P., a Del- AIMCO-GP, Inc., a Delaware
aware limited partnership corporation
AIMCO Properties Finance Part- AIMCO Properties Finance,
nership, L.P., a Delaware lim- Corp., a Delaware corporation
ited partnership
AIMCO/RALS, L.P., a Delaware AIMCO Holdings, L.P., a Dela-
limited partnership ware limited partnership
AIMCO/SA, L.L.C., a Delaware AIMCO Holdings, L.P., a Dela-
limited liability company ware limited partnership
AIMCO/Stonegate, L.P., a Dela- AIMCO Holdings, L.P., a Dela-
ware limited partnership ware limited partnership
AIMCO/Teal Pointe, L.P., a AIMCO Holdings, L.P., a Dela-
Delaware limited partnership ware limited partnership
AIMCO/Villa Ladera, L.P., a AIMCO Holdings, L.P., a Dela-
Delaware limited partnership ware limited partnership
AIMCO/Williams Cove, L.P., a AIMCO Holdings, L.P., a Dela-
Delaware limited partnership ware limited partnership
AIMCO/Woodlands-Tyler, L.P., a AIMCO Holdings, L.P., a Dela-
Delaware limited partnership ware limited partnership
Everest Investors 5, LLC, a Everest Properties, LLC, a
California limited liability California limited liability
company company
HomeCorp Investments, Ltd., an AIMCO/HIL, L.L.C., a Delaware
Alabama limited partnership limited liability company
AIMCO Holdings, L.P., a Dela-
ware limited partnership
OTC Apartments Limited Part- AIMCO/OTC, QRS, Inc., a Dela-
nership, a Florida limited ware corporation
partnership
Property Asset Management Ser- AIMCO Properties, L.P., a Del-
vices, L.P., a Delaware limit- aware limited partnership
ed partnership
Property Asset Management Property Asset Management Ser-
Services-California, L.L.C., vices, L.P., a Delaware limited
a California limited liability partnership
company
S.A. Apartments Ltd., an Ala- AIMCO Holdings, L.P., a Dela-
bama limited partnership ware limited partnership
Seasons Apartments, L.L.C., a AIMCO Holdings, L.P., a Dela-
Texas limited liability compa- ware limited partnership
ny
Seasons Apartments, L.P., a AIMCO Holdings, L.P., a Dela-
Delaware limited partnership ware limited partnership
Somerset Utah, L.P., a Colora- AIMCO Somerset, Inc., a Dela-
do limited partnership ware corporation
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement (Form S-3) and
related Prospectus of Apartment Investment and Management
Company for the registration of 372,688 shares of its common
stock and to the incorporation by reference therein of
(i) our report dated January 26, 1996, except for Note 17,
as to which the date is January 31, 1996, with respect to
the consolidated financial statements and schedule of Apart-
ment Investment and Management Company included in its
Annual Report on Form 10-K for the year ended December 31,
1995, filed with the Securities and Exchange Commission (the
"Annual Report") and (ii) our report dated January 20, 1995
with respect to the combined financial statements and sched-
ule of the AIMCO Predecessors (as defined in the notes
thereto) included in the Annual Report.
ERNST & YOUNG LLP
Dallas, Texas
July 23, 1996
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to
the use of our report (and all references to our Firm)
included in or made a part of this Registration Statement on
Form S-3 and the related Prospectus of Apartment Investment
and Management Company (the "Company") and to the incorpora-
tion by reference therein of (i) our report dated Novem-
ber 21, 1995, with respect to the combined statement of
revenues and certain expenses of the GECC Properties (as
defined in the notes thereto) included in the Company's
Current Report on Form 8-K dated December 29, 1995 (as
amended), filed with the Securities and Exchange Commission
and (ii) our report dated January 2, 1996 with respect to
the statement of revenues and certain expenses of the
Peachtree Park Apartments included in the Company's Current
Report on Form 8-K dated January 1, 1996, filed with the
Securities and Exchange Commission.
ARTHUR ANDERSEN LLP
Denver, Colorado
July 23, 1996
EXHIBIT 23.5
CONSENT OF SHUMAKER, LOOP & KENDRICK
We consent to the reference to our firm under the caption
"Legal Matters" in the Registration Statement on Form S-3
filed with the Securities and Exchange Commission as of the
date hereof and the related Prospectus of Apartment Invest-
ment and Management Company.
SHUMAKER, LOOP & KENDRICK
By:
John S. Inglis
Managing Partner
Tampa, Florida
July 24, 1996
